Junk Bonds Are Set to Outperform ‘Riskier’ Stocks, Fridson Says
- High-yield debt to return 5.2% annualized over next five years
- S&P 500 stocks are seen gaining 3% in rare underperformance
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Junk-debt returns will fall short of lofty expectations, but they’ll likely do better than stocks for the first time since the global financial crisis, according to high-yield guru Marty Fridson.
Speculative-grade US bonds are set for a total return of 5.18% over the next five years on an annualized basis. That falls short of the 1987-2024 mean of 8.48%, as well as the 6.80% median, Fridson, whose debt analysis has been studied by Wall Street for decades, wrote in a report Thursday.